by Kelvin Wade
Our President and Congress have finally devised a way to fix our broken economic situation. Amazingly, it requires no one to violate any oath they signed with any lobbyists. They don’t have to run it by their corporate or union paymasters. All they have to do to shore up our financial situation is…nothing.
Nothing at all.
By failing to come to an agreement with the Super Committee, after 2012, the trigger or “sequestration” kicks in. We thought a terrible consequence could turn Congressional corporate lackeys into statesman. The gamble failed.
With cuts already passed this past summer, when the trigger kicks in we will be talking about cuts to defense of a trillion dollars over the next ten years. That will mean scrapping the F-35 fighter program and other weapons modernization programs.
Pentagon Press Secretary George Little recently put it this way: “The reality is that we’ve done the analysis, and we would face the smallest Army and Marine Corps in decades, … the smallest Air Force in the history of the service, … [and] the smallest Navy since the Woodrow Wilson administration if sequestration were to happen.”
On the domestic front, Social Security and Medicare would be spared. That’s the good news. But there would be huge cuts in Veterans health benefits, transportation infrastructure, research and development, low income housing assistance, nutrition programs, border patrol, food inspection, nuclear power plant inspection, clean air monitoring, air traffic controllers, IRS agents and more.
Before you cheer the cuts to the IRS, without those agents, enforcement will take a hit and we won’t take in as much revenue.
There are real world implications. Cutting the military and government departments means higher unemployment. It will leave more people fighting for vanishing private sector jobs. This will lead to a new round of foreclosures. More neighborhoods will collapse and the businesses around them will close.
People are going to be hurt. People are going to die because of the lack of government enforcement on energy, air and water pollution and food inspection.
Also, at the end of 2012, by doing nothing, the Bush-Obama tax cuts will expire for everyone.
Those making over $250,000 will see the top marginal rate go from 35% to 39.6%. The wealthy will see taxes go up on income and capital gains. The “average American” will see their taxes go up from $400 to a few thousand dollars a year. That’s in addition to the payroll tax cuts that expire at the end of this year.
Ironically, by letting the Bush tax cuts expire, the tax increase on the wealthy will end up being larger than anything the Democrats have proposed.
While it’s in vogue to say both parties are equally responsible, the Republicans bear more of the responsibility for this outcome. It was their intransigence on tax increases that led to this. Just imagine if Democrats had signed a pledge that they would never cut any spending. We’d all be up in arms at their bullheadedness. It sounds crazy, doesn’t it? Yet, one political party has decided they will never vote for a tax increase for any reason. That makes rational governance impossible.
So, instead of thoughtful, statesmanlike governance, we have government by trigger. Taken together, the massive cuts and tax increases will either usher in an age of austerity or a depression. Welcome to the Divided States of America.